Home Arab world Jordan’s new PM caught between angry public, international lenders

Jordan’s new PM caught between angry public, international lenders

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Photo showing Jordan’s King Abdullah II shakes hands with Prime Minister Omar Al-Razzaz during a swearing-in ceremony of the new cabinet in Amman, Jordan June 14, 2018. (Reuters)

AMMAN: Jordan’s new prime minister won’t have much time to deliver on promises to rescind a proposed tax increase and implement economic reforms with more consideration for the country’s struggling poor and middle class.

Union leaders who toppled the previous prime minister last week through widespread protests say they will go back to the streets if his successor, Omar Razzaz, does not deliver.

Razzaz, a former senior World Bank official, faces a tough task: He must defuse public anger at economic policies seen by many as unfair, while introducing reforms that can reduce Jordan’s debt-to-GDP ratio to a level acceptable to international lenders.
He has promised a more inclusive path, but has also tried to lower expectations in recent days in meetings with representatives of unions, political parties and legislators.

“There is no magic stick. There is no painkiller. This is a long path, a difficult path,” he said earlier this week. “But God willing, the target is clear and the leadership is united with the people in achieving it.”

Jordan’s new government was sworn in on Thursday, after mass protests against price rises and austerity measures forced the prime minister’s resignation.

The new administration led by Harvard-trained economist Omar Al-Razzaz has already withdrawn the contested tax law which brought thousands of Jordanians to the streets, officials said.
The government shake-up has seen half the cabinet’s 28 ministers replaced, with Foreign Minister Ayman Safadi and Interior Minister Samir Al-Mabidin among those keeping their jobs.

The defense portfolio goes to Razzaz, while new ministers were appointed in the areas including finance, planning, international cooperation and regional development.

Since being asked to form a government by King Abdullah II on June 4, Razzaz said he had been engaged in talks with different parties to “reach a fair taxation system for everyone.”
Cash-strapped Jordan relies heavily on foreign donors and in 2016 secured a $723-million loan from the International Monetary Fund.

But austerity measures tied to the loan have seen prices of basic necessities rise across the kingdom.

Jordanians protested in Amman and other cities over a proposed tax hike, with the scale of demonstrations prompting the resignation of prime minister Hani Mulki.

The public rallies were followed by a crisis meeting with Saudi Arabia, the United Arab Emirates and Kuwait, concluding on Sunday with Jordan’s neighbors pledging $2.5 billion in aid.

The donors’ rival Qatar followed up with an offer of $500,000 in investment and promised to create 10,000 jobs for Jordanians.